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Recently, Nebraska AG Doug Peterson, in conjunction with the Director of the Department of Banking and Finance, Mark Quandahl, announced a settlement with four loan companies and their owners for alleged violations of three state laws, the Consumer Protection Act (CPA), the Uniform Deceptive Trade Practices (UDTPA), and the Nebraska Installment Loan Act (NILA). According to AG Peterson, three of the companies “managed and facilitated almost every aspect” of the fourth company’s business. The complaint alleged that the fourth company acted as an unlicensed lender to originate usury-based internet loans to Nebraska consumers by way of electronic transfer. In violation of the CPA and the UDTPA, AG Peterson alleged that the fourth company’s loan agreements deceptively stated that it was a “tribal entity subject to the exclusive jurisdiction of Cheyenne River Sioux Tribe, Cheyenne River Indian Reservation” when it was not; rather, according to the complaint, it is a limited liability company whose profits were distributed directly its owner. Pursuant to the Department of Banking and Finance’s authority to enforce the NILA, Director Quandahl alleged that the defendants “charged loan origination fees in excess of the state’s maximum origination fee permitted for installment loan licensees and non-licensed lenders.” Under the terms of the settlement, the companies and their owners will pay $150,000 to the state and establish a restitution fund of $950,000 to repay, pro rata, excess interest and fees paid by Nebraska consumers. In addition, more than $557,000 in loans taken out by Nebraska consumers and held by one of the four companies will be forgiven, and credit reporting agencies will be notified to remove the history of the loans. The companies and their owners are prohibited from originating loans in Nebraska until they comply with state law.

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